BLOCKCHAIN
BLOCKCHAIN
BLOCKCHAIN
Digital Currency Group plans to shut down institutional trading unit TradeBlock
Venture capital conglomerate Digital Currency Group Inc. announced plans to close its TradeBlock subsidiary that provides cryptocurrency trade and prime brokerage services for institutional investors.
According to a May 25 report from Bloomberg, the shutdown will officially be effective on May 31. “Due to the state of the broader economy and prolonged crypto winter, along with the challenging regulatory environment for digital assets in the U.S., we made the decision to sunset the institutional trading platform side of the business,” a DCG spokesperson told Bloomberg.
TradeBlock was acquired in 2020 by news media outlet CoinDesk Inc., also a subsidiary of DCG and spun out as its own standalone business. CoinDesk retained the indexing business and rebranded it into CoinDesk Indices, which provides crypto asset data and research.
The shutdown comes after DCG found itself in crisis after its subsidiary crypto lender Genesis Global Trading Inc. began to suffer troubles in the wake of the collapse and bankruptcy of FTX Trading Ltd. in late 2022, which was the world’s second-largest cryptocurrency exchange at the time. Additionally, DCG reported losses of about $1.1 billion last year, citing the bankruptcy of the cryptocurrency hedge fund Three Arrows Capital in July and its ripple effects on crypto markets.
DCG subsidiary crypto lender Genesis Global Holdco LLC was caught in the meltdown and was forced to suspend its lending arm in November and finally went bankrupt in January.
The collapse of FTX and the bankruptcy of 3AC led to an ongoing slump in crypto markets and a prolonged “crypto winter,” which caused DCG to shutter its wealth-management division, HQ, in January. The crypto conglomerate also reportedly explored selling its media division CoinDesk later the same month.
Earlier this month, DCG missed a $630 million debt payment to Genesis Global. Both companies are also currently embroiled in legal action after the United States Securities and Exchange Commission accused Genesis Global of trading unregistered securities through its Earn program.
Image: Pixabay
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